How to Find the Right Financial Planner

By Jocelyn Black Hodes, DailyWorth's Resident Financial Advisor

April 18, 2013

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You’ve decided you want to work with a financial professional, but how do you find one who understands you as well as your finances? Someone you can trust with your money, but also feel comfortable with on a personal level?

Finding the right match can take some work. But it’s worth making the effort. After all, you’re putting your hard-earned money and your plans for the future in this person’s hands.

Look for those with the credentials, expertise and experience to meet your needs. For general planning, a certified financial planner may be all you need. But, depending on your situation you may want someone with additional expertise in a particular area—if you’ve got complex tax issues, say, or you’re newly divorced and trying to untangle your joint finances. You can find out more about specific designations—from accredited tax advisors to certified divorce financial analysts to master certified estate planners—through the professional designations database of the Financial Industry Regulatory Authority (or FINRA).

Beware, as you make your decision, that there are some advisors who refer to themselves as “financial planners,” but may not necessarily hold the Certified Financial Planner® (CFP) designation. To become a CFP, a planner must meet education, examination, experience and ethics requirements developed by the CFP Board. They are the only ones who can legally display the CFP® certification after their name.

Once you’ve narrowed the list to a few finalists, check out their credentials through the Security Exchange Commission’s investment advisor database or through the FINRA website. And check to see if any formal complaints have been filed against them through FINRA’s BrokerCheck service or the SEC. (Ask the advisors which agency, FINRA or SEC, oversees their business.) Interview each one to make sure you’re comfortable with them and that they will provide the expertise you need. And ask for client references.

Keep in mind that financial professionals offer not just different designations and specialties, but different fee structures. Some planners charge flat out-of-pocket fees—per hour or per plan, or both. Others charge an annual fee of typically 1-2% of assets under management or take commissions based on products you buy like investments or insurance policies. Make sure you understand all of the potential fees upfront and how they could affect your budget and your investment results before you make your decision.

Bottom line

A good planner or advisor can help save you time and stress, and help you reach your financial goals faster. But in order to get the most for—and from—your money, you need someone who has the right expertise, approach, and fee structure, for your needs.